According to a local media China Business News report, Chinese telecoms giant Huawei Technologies Co will pay a reduced cash dividend to employee shareholders for 2021.

Huawei hasn’t made its dividend strategy public, but the paper wrote that its 1.58 yuan (US$0.25) dividend per share for 2021 was nearly 15% lower than the 1.86 yuan (US$0.29) dividend per share declared in 2020, reflecting the company’s financial difficulties.

According to LTN, Huawei’s internal documents show that it still allocated more than 50 billion yuan, roughly US$7,85 billion, in dividends last year. Therefore, of about 120,000 people participating in the employee stock ownership plan, each person received an average of nearly 400,000 yuan or about US$62,800 in 2021.

The reduction comes after Huawei chairman Guo Ping last December revealed an estimation of significant revenue loss after the US sanctions took effect. 

According to the South China Morning Post, Ping predicted that the company had a 28.9% drop in total revenue to 634 billion yuan (nearly US$99.6 billion) in 2021. 

This owes to Washington’s prohibition for Huawei to access high-end semiconductors, which has taken a toll on its lucrative smartphone business. Its market share of mobile phones has also dropped from the world’s No. 1 out of 10, and its operations are in a difficult period of survival.

Huawei is a 100% employee-owned private enterprise. It implemented the employee stock ownership plan through the labor union. As of December 31, 2020, the number of employees participating in the employee stock ownership plan was 121,269, and all participants were company employees.

According to business registration records on Tianyancha, Huawei founder Ren Zhengfei owns a 0.75% share in the company as a natural person shareholder and participates in an employee stock ownership plan. 

With major headwinds in business, Huawei is now looking to expand its revenue streams by investing in mining technology and other industries. Intelligent electric vehicles are one of the hottest new areas to assist carmakers in better equipping their cars with intelligent features like autopilot. This trend has accelerated as companies try to commercialize autonomous driving technologies.

Sign up to receive our latest news!

By submitting this form, I agree to the terms.